Freeport LNG explosion to shut facility for at least 3 weeks
OPEC spare capacity set to fall to lowest for over a decade
Battery shortages hinder wind and solar grid integration
Asia’s jet fuel refining margins hit record high
U.S. PETROLEUM inventories increased by +4 million bbl to 1,685 million bbl last week. The one-week increase was the largest so far this year. But stocks are still at the lowest seasonal level since 2008:
South Africa’s coal and a just energy transition
U.K. economy on the cusp of a recession
U.S. East Coast hit by local jet fuel shortage
U.S. West Coast ports start pay talks ($WSJ)
China’s top leaders jockey for position ($WSJ)
China calls for elderly to get vaccinated (trans.)
U.K. REAL GDP declined in both February and March, a sign growth was stalling even before the rise in utility prices and payroll taxes took effect in April:
TEXAS power consumption has surged to a near-record as the state is hit by a sustained period of much higher than normal temperatures for the time of year:
U.S. PETROLEUM inventories increased by +3 million bbl to 1,699 million bbl last week (SPR crude -7 million; commercial crude +8 million; gasoline -4 million; distillate -1 million; and jet +2 million):
U.S. DISTILLATE inventories fell -1 million bbl to 104 million bbl. Distillate availability shows no improvement but it is not deteriorating either at present:
U.S. GASOLINE inventories depleted by -4 million bbl to 225 million bbl last week, the lowest for the time of year since 2014, as distillate shortages bleed across into gasoline:
India’s railways struggle to transport enough coal
India relaxes coal mine environmental rules ($BBG)
Ukraine cuts Russian pipeline gas flows to Europe
Global mining is central to future energy system
BlackRock updates energy-climate investor principles
Germany plans for disruption of Russian gas supply
U.S. ammonia prices increase with global gas prices
Nigeria subsidises fuel to keep aircraft flying ($BBG)
China forecasts record rain along south coast (trans.)
China issues flood warnings along the Yangtze (trans.)
China hydro generation rises on heavy rains ($BBG)
U.K. threatens energy majors with windfall tax ($FT)
U.S. inflation – how prices are really measured ($WSJ)
CHINA generated a record 221 TWh of hydro electricity in the first three months of the year, up from 196 TWh in the same period in 2021, relieving pressure on coal and gas inventories and prices:
U.S. EQUITY PRICES signal investors expect an imminent business cyclical slowdown – either a mid-cycle soft patch or an end-of-cycle recession. The S&P 500 index is down by almost 5% compared with the end of May 2021 and down by more than 11% in real terms:
WTI’s negative price – inside story ($BBG)
India faces coal and electricity shortage
OPEC/IEA tensions break into the open
OPEC reduces oil consumption forecast
German economists downgrade outlook
CNOOC to exit U.S./U.K./Canada assets
India’s refiners buy Russian oil ($BBG)
Jet fuel supplies are tightening ($BBG)
Energy crisis ousts climate policy ($FT)
U.S. petroleum product exports in 2021
U.S CONSUMER PRICES are increasing between two and four times faster than the central bank’s target of a little over 2%. Core prices for items other than food and energy have increased at a compound annual rate of 4.0% over the last two years and were advancing at an annualised rate of 5.8% in the three months from December to March. Services prices, which are normally more stable but also more labour-intensive, increased at a compound rate of 3.4% over the last two years and were rising at an annualised rate 7.1% between December and March. The rapidly rising cost of energy, raw materials, manufactured products, freight and labour is becoming more deeply entrenched in the rest of the economy:
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EU proposes ban on Russian coal from August
China/Australia coal ban as awkward precedent
IEA countries to release further 60 million bbl
Russia/China switch payments to yuan ($BBG)
Shell writes off $5 billion for exit from Russia
Shanghai quarantine facilities expand (trans.)
U.S. ethane consumption is growing
U.S. jet fuel supplies tighten ($BBG)
U.S. PETROLEUM inventories including the SPR rose by +1 million bbl last week – the first increase for 13 weeks and the first increase this year:
U.S. DISTILLATE inventories have risen by a total of +2 million bbl over the two most recent weeks after declining in 9 of the 10 previous weeks by -17 million bbl, as exceptionally high fuel prices incentivise more production and discourage consumption:
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[MUST READ] Sanctions and a long conflict
[MUST READ] Wars and settlements ($BBG)
SPR sale – formal announcement and details
France’s electricity grid calls for conservation
China to buy Russia LNG via middlemen ($BBG)
Australia’s export earnings boosted by conflict
EU/Russia standoff over gas payments
U.S. jet fuel prices surge on East Coast
Aviation recovery at risk from fuel prices ($FT)
Sri Lanka leader imposes state of emergency
United Kingdom takes Russian diesel delivery
U.S. MANUFACTURERS reported a less-widespread increase in business activity last month. The ISM composite index fell to 57.1 in March from 58.6 in February and the lowest reading since Sep 2020 as the expansion decelerates. There was also a sharp deceleration in new orders growth in March. The ISM new orders index slipped to 53.8 from 61.7 the month before, consistent with a slowdown in the business cycle ahead:
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EU reviews link between electricity and gas prices
U.S./EU and the idea of a new Marshall Plan for energy
Rhine’s low water levels threaten diesel flows ($BBG)
Fertiliser prices surge as a result of war ($BBG)
Austin airport issues jet fuel alert ($BBG)*
* During the Second World War, Britain ordered inbound shipping to bunker overseas to conserve oil and coal for the war effort and reduce the number of tankers that needed to run the gauntlet of German submarine attacks in the Atlantic.
EU+UK GAS inventories hit a post-winter low of 291 TWh on March 19 according to preliminary estimates from Gas Infrastructure Europe. Stocks have since risen by around 8 TWh. The provisional post-winter low occurred on the earliest date since 2012 and fell 11-12 days earlier than the median for the last decade as a result of mild temperatures and exceptionally high prices discouraging consumption and attracting maximum imports:
EU+UK GAS inventories have depleted by 578 TWh over winter 2021/22. The drawdown compares with averages of 651 TWh over the previous five years and 561 TWh over the previous ten years. The post-winter minimum is the lowest since the winter of 2017/18. But it is only 81 TWh below the five-year average and 57 TWh below the ten-year average. Stocks have ended this winter low but not exceptionally so owing to mild weather and exceptionally high prices:
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